Wall Street moved within a tight range on Wednesday as signs of the economic impact of the COVID-19 pandemic offset optimism over a stimulus package, with investors keeping an eye on the last Federal Reserve meeting for the year.
Airline stocks retreated after Southwest Airlines Co flagged a higher cash burn in the fourth quarter, as well as increased trip cancellations in December. Southwest’s shares fell 0.9%.
Data showed U.S. retail sales fell 1.1% in November, declining for a second straight month, as new coronavirus infections and decreasing household income weighed on spending.
U.S. congressional leaders reported substantial progress toward a spending bill late on Tuesday, while a string of media reports suggested a deal to release more money into the economy was imminent.
The Fed is also expected to keep lending rates at near-zero and signal their staying there for the foreseeable future at the conclusion of their meeting later in the day. Markets are anticipating an update on the Fed’s bond-buying program.
“They might not have reached a deal yet, but are definitely headed in the right direction and some sort of a deal will soon be announced,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“The market is going to be looking at the (Fed’s) bond-buying program. So while we get an overall dovish communiqué, the key focus will be if the Fed is going to indicate any pullback in using its tools.”
While a mix of low interest rates and increased liquidity have brightened the outlook for equities, headwinds from the virus have sobered near-term expectations, despite the recent launch of a vaccination program.
At 10:00 a.m. ET, the Dow Jones Industrial Average was down 6.52 points, or 0.02%, at 30,192.79, the S&P 500 was up 0.30 points, or 0.01%, at 3,694.92. The Nasdaq Composite was up 4.92 points, or 0.04%, at 12,599.98.
The Nasdaq fell after touching a record high shortly after the open.
Utilities and real estate were the best performing S&P 500 sectors on Wednesday.
Twitter Inc rose 5.5% after J.P. Morgan upgraded its stock to “overweight”, as the brokerage expects the social media company to stage a significant rebound in online advertising following a pandemic-fueled decline.
Marijuana producers Aphria Inc and rival Tilray Inc gained 1.5% and 20.0%, respectively, after the two companies agreed to combine their operations and create the largest cannabis producer by sales.
Advancing issues outnumbered decliners for a 1.20-to-1 ratio on the NYSE and a 1.14-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and no new low, while the Nasdaq recorded 107 new highs and seven new lows.
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